Buy limit. Placed below the market. Fills only if price dips to your level: you buy the pullback at a better price.
Interactive figure · try it
Market orders
A market order fills immediately at the best available price: you buy at the ask and sell at the bid. You get certainty of execution but not of price, which matters in fast markets.
Limit and stop entries
A buy limit sits below the current price and fills only if price comes down to it: you are buying a dip. A buy stop sits above the current price and fills only if price rises to it: you are buying strength, such as a breakout.
Sell limits sit above price, sell stops below. The rule: limits get you a better price, stops get you confirmation.
Exits: stop-loss, take-profit, trailing
A stop-loss closes the position at a price that proves the idea wrong. A take-profit closes it at your target. A trailing stop follows price at a fixed distance as it moves in your favour, locking in more gain the further it runs, and never moves back.
Key takeaways
- Market = certain fill, uncertain price
- Limit = better price, stop = confirmation
- Every position deserves a stop-loss
- Trailing stops lock in gains as price runs